GOP to unveil tax code overhaul Wednesday

"This is going to be a tax cut for middle-income families", said one senior administration official.

At the core of the GOP plan: slashing both corporate and individual tax rates. "At the same time, our businesses in America can't compete with the low tax rates of foreign nations".

House Republicans are being briefed on the plan at a gathering near Capitol Hill.

Mr Trump arrived in IN aboard Air Force One with in senator Joe Donnelly, who is among the most endangered SenateDemocrats facing re-election in 2018. Trump said Friday night during a campaign rally in Huntsville, Alabama, that a tax plan would be released this week, and described it as "massive tax cuts". The proposal also gives committees the flexibility to create a fourth bracket that could potentially eliminate a potential tax cut for the wealthiest Americans.

The Republican proposal "limits the maximum tax rate applied to the business income of small and family-owned businesses conducted as sole proprietorships, partnerships, and S-corporations to 25%".

Republicans have agreed on raising the bottom tax rate two percentage points to 12 percent in order to offset a huge tax cut for the top individual tax rate, down almost five points to 35 percent from 39.6 percent.

The White House also wants to increase the child tax credit, which now tops out at $1,000, but it is also leaving the details of any increase up to the committees, too.

Many of these moves represent breaks from Republican orthodoxy. And many supply-side Republicans are skeptical of the "economic value" of child tax credits.

Trump declared repeatedly the plan would provide badly needed tax relief for the middle class. The "death tax" would also be ended. The devil is in the still-unspecified details - and the deductions, some of which would remain as others are phased out.

The public reveal of the plan was set for Wednesday.

Taxing passthrough income at a maximum rate of 25%. Or will some of it get pushed into the upper tax bracket? The income levels at which the three brackets would apply were not specified.

In April, for instance, the White House signaled its support for a reduction of the top income tax bracket from 39.6 percent to 35 percent. "It's the difference between one term and two", Graham said. They could write off the costs of those investments over five years, instead of following existing depreciation schedules that stretch up to 39 years.

Trump and Treasury Secretary Steven Mnuchin previously have said they didn't want the tax plan to offer any tax cut to the highest earners - and that they'd balance a rate cut by eliminating deductions that the wealthy use to reduce their tax bills.

The rate is "going to be substantially lower so we bring jobs back into our country", Trump said. This is a combination of a "repatriation holiday" with what amounts to a forced repatriation. Giving companies a tax break for repatriating cash and other assets could spur investment in the USA and create new job, though the extent of the economic impact is uncertain.

The plan released on Wednesday is more of a framework than a final product.

This is good news for Republicans, as the state and local tax deduction (SALT) is most valuable in blue states like NY and New Jersey, but bad news for tax payers in those states.